Employment and Wages

July 8, 2004

Wages in BC

The bizarre news release issued by Minister of Skills, Development and Labour Graham Bruce on July 6th warrants a lot more attention. Bruce is to be congratulated for saying that, according to Statistics Canada, $16 or more per hour is necessary to support a family of four in an urban centre. Ironically he drew attention to that reality just one day before the National Council of Welfare issued its report saying that "In general, welfare incomes in 2003 continued to deteriorate through cuts, freezes and the eroding effects of inflation." How can Bruce admit that $16 per hour (about $32,000 per year) is necessary for a family of four while the Campbell government provides barely half of that ($17,509 per year) in the form of disability assistance to a family of four with two disabled parents!

Statistics Canada has yet to comment on the reliability of its estimates on the distribution of wages, but a reliable source indicates that the data are published in the "Labour Force Historical Review". Those data, and the table in Bruce's news release, show that BC is falling behind. Alberta increased the number of people earning $16 an hour or more by 5.7 points (from 43.7 to 49.4) between 2000 and 2003; Ontario increased by 5.2 points which was also the Canadian average, but BC increased by only 3.3 points.

Graph showing Index of Average Hourly Wages The Campbell government has driven wages lower for hourly paid workers in the public sector, yet it now tries to cover its actions with claims about BC leading the nation in 2003 with the percentage of employees making more than $16 per hour. Statistics Canada publishes information on average hourly wages. In April 2004, the most recent month available, the average hourly wage (excluding overtime) for hour paid workers in BC was $17.27 compared to $17.28 for the Canadian average. In January 1991 BC workers enjoyed an advantage over the Canadian average with average rates of $13.88 compared to $13.45. Using the January 1991 rates as the base for an index, the graph shows BC falling behind the growth in the rest of the country. Growth in BC was roughly the same as the Canadian average in the early 90s. From late 1994 through early 1998, BC wages grew faster; then until the New Era began in 2001, they grew at the same pace as the national average. Since Campbell came to power, average hourly wages in BC have not grown as fast as the Canadian average. The April 2004 average hourly wage is 6.2% higher than the April 2001 average for Canada, but only 4.2% higher in BC.

Statistics Canada publishes data on average weekly earnings which also includes income for salaried workers. The Canadian average weekly income grew by 6.0% between April 2001 and April 2004, but it grew by only 4.8% in BC.

When the preliminary provincial accounts were released by Statistics Canada in late April, they showed that personal income in BC had slipped to fourth position behind Quebec, and personal disposable (after tax) income would soon follow suit if current growth patterns are maintained.

The Campbell government has failed to deliver on its key election promise, economic prosperity. No amount of statistical manipulation can hide what the majority of British Columbians have experienced.

July 7, 2004

Pumping Up Employment and Wages

On July 6th Labour Minister Graham Bruce set a new record for a misleading news release. He claimed that BC leads Canada in job growth and that it has more people making over $16 per hour. The job numbers depend on cherry picking the dates for comparison, and his wage data is simply wrong.

It is apparently very important to the Campbell government to pump up every possible report on economic performance so as to try to convince British Columbians that three years of pain have yielded some result. Statistic Canada's Labour Force Survey for June will be released on Friday. Rather than wait for the most recent figures, the Minister of Skills Development and Labour issued a news release on Tuesday comparing employment gains by province from December 2001 to May 2004. During that period, using seasonally adjusted numbers, BC's employment grew by 7.4% compared to the Canadian average of 6.1%. Why would anyone use December 2001 as the base for comparison, unless it was to distort the numbers? May 2001 is the starting point for comparisons relevant to the last BC election. Instead of 7.4% as employment growth, the number shrinks to 4.1% for BC when May 2001 is the starting point.

It costs $3 per series to purchase data from Statistics Canada. Hence the data for 10 provinces and Canada for employment and wages is a minimum of $66. Paying that fee, however, will not allow you to verify the government news release with respect to wage data. The publicly available data include average hourly wages by province as measured by the Labour Force Survey, but they do not include a distribution of wages as included in the Ministry's news release. Hence, when Graham Bruce says that according to the Labour Force Survey 57.2% of British Columbians earned more than $16 per hour in 2003, it is not possible to verify his figure. It is possible that the government is using unpublished data available to it but not to the public, or perhaps they are being creative. One way or the other, the Campbell government attacked members of HEU for making that much and used its legislative muscle to impose a 15% wage cut. It is more than a little strange that they would now try to boast about the number of people earning over $16 per hour in 2003; what about 2004 after their imposed wage cuts?

Data from the "Survey of Employment, Earnings and Hours", also published by Statistics Canada, show that average weekly earnings in BC grew by only 2.6% between April 2000 and April 2003 compared to 5.2% for the Canadian average. Between Arpil 2000 and April 2004 (the most recent month available), average weekly earnings in BC grew by only 5.0% compared to 7.7% for the Canadian average. That makes it hard to believe the suggestion in the BC government news release about relatively high wages in BC.

Not that I would ever distrust information from the Campbell government, but just to make sure and enable verification of their news release, I have sent the following enquiry to Statistics Canada:

From: David Schreck [mailto:Schreck@StrategicThoughts.com]
Sent: Tuesday, July 06, 2004 8:58 PM
To: 'labour@statcan.ca'
Subject: LFS wage distribution data

On July 6, 2004, British Columbia's Ministry of Skills, Development and Labour issued a news release using Labour Force Survey data to compare job growth between December 2001 and May 2004 by province. It also included a comparison between 2000 and 2003 of the percentage of employees by province receiving $16 or more per hour. (See http://www2.news.gov.bc.ca/nrm_news_releases/2004SDL0014-000547.htm)

I cannot find any data published by Statistics Canada in CANSIM or elsewhere from the Labour Force Survey that allows me to verify the calculation on the percentage of employees by province earning $16 or more per hour. Could you please point me to that data? If such data are available, could you also please advise me of the standard error of the estimate for that series?